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Recovery Loan Scheme could save you money on finance arrangements

By Chris Dawson September 13, 2021 - 3:00 pm

Rangewell say that many ecommerce businesses have omitted to look at the Recovery Loan Scheme, which could save significant costs compared to current finance arrangements. Data that will be revealed in this Tuesday’s finance webinar with ecommerce finance experts Rangewell shows that the days of Ecommerce companies only having access to high cost, short term finance are long gone – but unfortunately the majority of ecommerce borrowers are not yet taking advantage of the situation.

As ecommerce has boomed over the last 18 months, mainstream lenders have quickly realised that ecommerce businesses are more resilient and more profitable than their brick and mortar competitors and have moved to offer more competitive borrowing rates.

Research by Rangewell, discussed in the webinar shows that

  • Lending rates have reduced substantially
  • The availability of term loans (those over 12 months) has grown exponentially
  • Borrowers who weren’t eligible for lending a years ago and often now receiving multiple finance offers

“Ecommerce finance has changed dramatically over the last 12 months – Ecommerce companies who haven’t checked if they can refinance at cheaper rates or for longer terms are missing a trick”
– Alasdair McPherson, Head of Lender Relations, Rangewell

A key change in the funding landscape for ecommerce borrowers is the emergence of a much wider range of lenders offering the Recovery Loan Scheme. This is a UK Government backed scheme that has given a large number of lenders the confidence to lend to growing business because the government guarantees 80% of the finance to the lender (although the borrower remains liable for 100% of the debt).

As well as offering much cheaper finance – because the interest rates are capped by the Government – the Recovery Loan Scheme explicitly allows borrowers to consolidate and refinance higher interest loans making it very attractive to ecommerce borrowers who have historically gone for quick, expensive loans via Marketplace lenders

“There is a common misperception from ecommerce clients that they are not eligible for the UK Government’s Recovery Loan Scheme because they “have done well” during the pandemic, but in reality in the majority of cases they have been severely affected by supply chain delays and staffing issues – meaning that they are most certainly eligible – they just need to be speaking to the right lenders and be explain their circumstances clearly”
– Marium Mahmood, Head of Ecommerce Partnerships, Rangewell

Key points that borrowers should also consider with the Recovery Loan Scheme

  • Lending terms can be up to 6 years
  • The Loan can be used as well as Bounce Back and CBIL Loans
  • The loan can be used by businesses to consolidate current loans
  • The requirement for Personal Guarantees are lower than for normal lending with lenders not allowed to hold any guarantee over principal private residences for any size of loan and not able to ask for personal guarantees of any sort for facilities under £250,000

To find our more about the latest range of finance available for all types of ecommerce providers, readers should attend the Tamebay / Rangewell finance webinar this Tuesday, the 14th of September at 11am.

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